e-invoicing under GST – What is e-Invoicing? Applicability & Implementation Date

e-Invoicing denotes electronic invoicing. Just like how a GST-registered business uses an e-way bill while transporting goods from one place to another. Certain GST-registered businesses must generate e-invoices for Business-to-Business (B2B) transactions.

Team Clear provides the best-in-class e-invoicing solution for businesses of any scale and industry. Do not miss exploring the Clear e-Invoicing solution!

Latest Updates

1st August 2022
The e-Invoicing system for B2B transactions has now been extended to those with an annual aggregate turnover of more than Rs.10 crore up to Rs.20 crore starting from 1st October 2022, vide notification no. 17/2022.

24th February 2022
The e-Invoicing system will get extended to those annual aggregate turnover of more than Rs.20 crore up to Rs.50 crore starting from 1st April 2022, vide notification no. 1/2022

30th June 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th September 2021.

1st June 2021
CBIC has notified vide Central Tax Notification no.23 dated 1st June 2021 that the e-invoicing system shall not apply to a government department and local authority.

30th March 2021
The CBIC has issued a notification seeking to waive the penalty imposed on non-compliance of dynamic QR code provisions for B2C invoices between 1st December 2020 and 30th June 2021, provided the said person complies with the provisions of the said notification from 1st July 2021.

What is e-invoicing under GST?

‘e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal.

In its 35th meeting, the GST Council decided to implement a system of e-Invoicing, covering specific categories of persons, mostly large enterprises. Later on, it has been expanded to cover mid-sized businesses as well.

e-Invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e-invoice portal. Thus, it automates multi-purpose reporting with a one-time input of invoice details. The CBIC notified a set of common portals to prepare e-invoices via Notification No.69/2019 – Central Tax.

Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN). The National Informatics Centre launched the first IRP at einvoice1.gst.gov.in.

All invoice information gets transferred from this portal to both the GST portal and e-way bill portal in real-time. Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generation of part-A of the e-way bills, as the information is passed directly by the IRP to the GST portal.

Team Clear provides the best-in-class e-invoicing solution for businesses. The Clear e-invoicing solution also provides an e-Invoicing Tally Connector, enabling taxpayers to perform e-invoicing activities without leaving a tally screen. Team Clear ensures a safe migration to an upgraded UI with no changes to your historical data.

Team Clear also offers various modes through which e-invoices can be generated by the taxpayers, such as seamless API integrations, Excel mode, FTP, SFTP or Tally connector. The user can enjoy numerous value additions such as-

• Seamless generation of 5,000 e-invoices per minute
• Integration with a high-fidelity solution with 99.99% uptime
• 100+ data validations to ensure an error-free smooth e-invoicing experience
• Auto-retry of failed EWBs (with distance error) to improve the success rate of EWB generation
• Automatic generation of the e-way bill after IRN generation without any ingestion of data
• Faster loading of ‘e-invoices’ and ‘e-way bills’ on the screen for as many as 1 lakh documents
• Reconciliation vis-a-vis e-way bill and GSTR-1 data, insightful reports, customised print template for e-invoice, data archiving, etc.

To whom is e-invoicing applicable?

The taxpayers must comply with e-invoicing if the turnover exceeds the specified limit in any financial year from 2017-18 to 2021-22. Also, the aggregate turnover will include the turnover of all GSTINs under a single PAN across India.

If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year.

Suppose, ABC ltd aggregate turnover was as follows-
FY 2017-18: Rs 15 crore
FY 2018-19: Rs 17 crore
FY 2019-20: Rs 24 crore
FY 2020-21: Rs 19 crore
FY 2021-22: Rs 18 crore

The ABC Ltd shall mandatorily generate e-invoices from 01.04.2022 irrespective of the current year’s aggregate turnover as it has crossed the Rs 20 crore turnover limit in FY 2019-20.

However, irrespective of the turnover, e-Invoicing shall not be applicable to the following categories of registered persons for now, as notified in CBIC Notification No.13/2020 – Central Tax-

• An insurer or a banking company or a financial institution, including an NBFC
• A Goods Transport Agency (GTA)
• A registered person supplying passenger transportation services
• A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
• An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax)
• A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax)

What is the current system in place for issuing invoices?

Currently, businesses generate invoices through various software, and the details of these invoices are manually uploaded in the GSTR-1 return. Once the respective suppliers file the GSTR-1, the invoice information is reflected in GSTR-2B for the recipients. On the other hand, the consignor or transporters must generate e-way bills by again importing the invoices in excel or JSON manually.

Under the e-invoicing system, the process of generating and uploading invoice details will remain the same. It’s done by importing using the excel tool/JSON or via API integration, either directly or through a GST Suvidha Provider (GSP). The data will seamlessly flow to GSTR-1 preparation and for the e-way bill generation too. The e-invoicing system will be the key tool to enable this.

What is the process of getting an e-invoice?

The following are the stages involved in generating or raising an e-invoice.

1. The taxpayer has to ensure to use of the reconfigured ERP system as per PEPPOL standards. He could coordinate with the software service provider to incorporate the standard set for e-invoicing, i.e. e-invoice schema (standards) and must have the mandatory parameters notified by the CBIC, at least.
2. Any taxpayer has got primarily two options for IRN generation:
   • The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP) such as ClearTax.
   • Download the bulk generation tool to bulk upload invoices. It will generate a JSON file that can be uploaded to the e-invoice portal to generate IRNs in bulk.
3. The taxpayer must thereafter raise a regular invoice on that software. He must give all the necessary details like billing name and address, GSTN of the supplier, transaction value, item rate, GST rate applicable, tax amount, etc.
4. Once either of the above options is chosen, raise the invoice on the respective ERP software or billing software. Thereafter, upload the details of the invoice, especially mandatory fields, onto the IRP using the JSON file or via an application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication. There are several other modes of interacting with IRP, such as SMS-based and mobile app-based.
5. IRP will validate the key details of the B2B invoice, check for any duplications and generate an invoice reference number (hash) for reference. There are four parameters based on which IRN is generated: Seller GSTIN, invoice number, FY in YYYY-YY, and document type (INV/DN/CN).
6. IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR code in Output JSON for the supplier. On the other hand, the seller of the supply will get intimated of the e-invoice generation through email (if provided in the invoice).
7. IRP will send the authenticated payload to the GST portal for GST returns. Additionally, details will be forwarded to the e-way bill portal, if applicable. The GSTR-1 of the seller gets auto-filled for the relevant tax period. In turn, it determines the tax liability.

A taxpayer can continue to print his invoice as being done presently with a logo. The e-invoicing system only mandates all taxpayers to report invoices on IRP in electronic format.

How will e-invoicing benefit businesses?

Businesses will have the following benefits by using e-invoice initiated by GSTN-

1. e-Invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
2. e-Invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors.
3. Real-time tracking of invoices prepared by the supplier is enabled by e-invoice.
4. Backward integration and automation of the tax return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating the part-A of e-way bills.
5. Faster availability of genuine input tax credit.
6. Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.

How will e-invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways-

• Tax authorities will have access to transactions as they take place in real-time since the e-invoice will have to be compulsorily generated through the GST portal.
• There will be less scope for manipulating invoices since the invoice gets generated before carrying out a transaction.
• It will reduce the chances of fake GST invoices, and the only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.

What are the mandatory fields of an e-invoice?

e-Invoice must primarily adhere to the GST invoicing rules. Apart from this, it should also accommodate the invoicing system or policies followed by each industry or sector in India. Certain information is made mandatory, whereas the rest of it is optional for businesses. Many fields are also made optional, and users can choose to fill up relevant fields only. It has also described every field along with the sample inputs for the interested users. One can see that certain required fields from the e-way bill format are included now in the e-invoice, such as the sub-supply type.

Below is the gist of the contents of the latest e-invoice format as notified on 30th July 2020 via Notification No.60/2020 – Central Tax:

1. 12 sections (mandatory + optional) and six annexures consisting of a total of 138 fields.
2. Out of the 12 sections, five are mandatory, and seven are optional. Two annexures are mandatory.
3. The five mandatory sections are basic details, supplier information, recipient information, invoice item details, and document total. The two mandatory annexures are details of the items and the document total.

The following fields must be compulsorily be declared in an e-invoice:  

How does the e-invoice look like?

The e-invoice format notified is as follows:  

Check out the detailed format of an e-invoice

FAQs on e-invoicing

For more FAQs on e-Invoicing, read our article on e-Invoicing FAQs.